ALEX SALMOND was yesterday accused of spending taxpayers’ money on “referendum propaganda” after revealing plans to spend an extra £800,000 on spin over the next year.

Scottish First Minister and leader of the Scottish National Party Alex Salmond [PA]

The extra funding came to light in revised draft budget documents which showed £800,000 was allocated to “the referendum on Scottish independence” in the coming financial year.

Ministers had not set aside any extra cash for the referendum in the original document.

It later emerged that the cash had been generated from interest on Scottish Water’s use of short-term loans, and will be “deployed to support strategic communications” surrounding next year’s ballot.

Critics yesterday accused the First Minister of “spinning through a referendum” using taxpayers’ cash. But Scottish Government officials said that the project would not add any extra cost to the referendum.

Tory finance spokesman Gavin Brown said: “It seems Alex Salmond has taken money out of infrastructure, and put it into his pot for spinning through a referendum.

“On countless occasions, the Scottish Government has failed to be straight with the Scottish people about its plans to break up the UK, and dodged almost every question asked.

“It is time for it to come clean on exactly what this hastily moved money will be spent on.”

Labour’s Drew Smith said that the extra cash could have been spent on helping struggling families and added: “At a time when ordinary Scots are struggling to pay bills and put food on the table, it seems the sky is the limit for Alex Salmond and his referendum propaganda.”

The cost of holding the referendum was originally estimated at around £10million, revised to £13.7million earlier this year.

An extra £100,000 was added to the total cost recently, with the cost of election hardware and materials reminding young people to register to vote cited as the reason for the increase.

A Scottish Government spokeswoman said: “There has been no change to the cost of the referendum. The total cost is estimated to be around £13.7million, with £800,000 of that being spent this year, and the rest in 2014-15.”